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Thu 31 Mar 2016 02:10 PM

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Meydan 'surprised' by reports of $381m Arabtec dispute revival

Arabtec board reportedly resolve to reinitiate the long-running arbitration process against Meydan over contract dispute

Meydan 'surprised' by reports of $381m Arabtec dispute revival
The Meydan Racecourse will hold the Dubai World Cup this weekend. (Representational image)

Dubai's Meydan Group has expressed its "surprise" over reports surrounding the revival of the Dubai racecourse construction contract dispute by Arabtec.

Arabtec is set to recommence its attempt to recover a claim of $381 million it lodged against Meydan over a contractual dispute to build the Meydan Racecourse, which recently hosted the Dubai World Cup, the world’s richest horse race.

According to a statement to the Dubai Financial Market, Arabtec stated that its board of directors have resolved to reinitiate the long-running arbitration process against Meydan.

In a statement issued by Meydan to Construction Week, the company said: "We are surprised to hear the recent rumours about Arabtec’s suggested intentions (which remain unverified) to bring some legal proceedings against it. Meydan is not aware of any reasons or grounds for any such uncorroborated suggestions."

The statement added: "Meydan has, at all material times, seen Arabtec as a strong ally and support, and holds nothing short of full respect and esteem for all members of Arabtec’s board of directors. No doubt, both Meydan and Arabtec will attend to all matters by and between them in the future in utmost good faith’."

Arabtec and the Malaysian contractor WCT Berhad originally won the $1.2 billion contract to build the Meydan Racecourse development in September 2007, at the peak of Dubai's construction boom.

But Meydan cancelled the contract 16 months later, saying the contractors had not kept to the construction timetable.

The joint venture subsequently launched an arbitration action against Meydan, alleging breach of contract, with the claim standing at $762 million.

In response to that, Meydan counter-launched a $952.8 million legal claim against the joint venture of Arabtec/WCT in 2012.

Soon afterwards, in 2013, both the parties agreed to withdraw their cases from the Dubai International Arbitration Centre (DIAC) while negotiations were in process.

In a joint media statement the same year, Meydan and Arabtec said that they were determined to reach an amicable agreement over all the outstanding claims and counter-claims.

"Four years of legal proceedings have failed to make sufficient progress so we have decided to find a faster and more practicable way forward to resolve matters. This is a very welcome initiative and we remain optimistic, confident and committed to reaching an amicable out-of-court settlement.”

However, WCT won the dispute in July 2015 and was awarded by the DIAC a final settlement in the case worth $299 million, as well as arbitration costs of $2.2 million and legal costs of $7.2 million.

But Arabtec till date has been unable to reach a deal with Meydan.

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